Investing when you’re retired isn’t one-size-fits-all

How should you invest once you stop working? There isn’t just one answer. How you invest will be different from how any other retired person invests – and how you invest one part of your portfolio will be different from how you invest another part. The right decision comes down to your goals for your money.

Here are some things to keep in mind for two common goals.

Investing to generate income

Even if you have a pension and government benefits, you’ll likely be putting at least some of your retirement savings to work generating a portion of your retirement income. Consider:

·A mix of safe investments such as term deposits to generate income in the short term and investments such as mutual funds with the potential to grow faster than inflation to protect your standard of living in the future
The tax impact of different types of investments — for example, interest is fully taxable but stocks may earn more tax-efficient dividends and capital gains
The tax impact of withdrawals from different types of accounts — for example, RRSP/RRIF withdrawals are taxed as income but TFSA withdrawals are tax-free

Investing to create an inheritance

Maybe you’ve earmarked some of your money to pass along to the next generation. Once you have a will that sets out who gets what, consider:

Investment options that include estate planning opportunities
The tax impact of different types of bequests — for example, a joint account passes to the joint owner tax-free and an RRSP/RRIF passes to a spouse tax-free, but many other assets are taxed on death

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Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated. Credential Securities is a registered mark owned by Aviso Wealth Inc.